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Forex - GBP/USD lower after BoE Fisher’s dovish remarks

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Forex Pros - The pound erased gains against the U.S. dollar on Tuesday, after Bank of England policymaker Paul Fisher defended the bank's stance on low interest rates, despite above-target inflation.

GBP/USD retreated from 1.6253, the pair's highest since June 15, to hit 1.6180, slipping 0.09%.

Cable was likely to find support at 1.6109, Monday's low and resistance at 1.6282, the high of June 15.

Speaking in London, Fisher, the bank's executive director for markets, said the central bank's Monetary Policy Committee was determined to bring inflation, currently at 4.5%, back to its 2% target over the next two or three years.

But he added there are risks of both worsening inflation and weak growth leading to deflation.

"The MPC are trying to set the best path back to the inflation target, but even the best path is an extremely uncomfortable one," he said.

Also Tuesday, official data showed that the U.K. public sector borrowing fell in May, to GBP15.1 billion from GBP16.4 billion pounds in May 2010, just below economists' forecast's for borrowing of GBP15.7 billion.

The pound was also lower against the euro, with EUR/GBP rising 0.41% to hit 0.8846.

Later in the day, Greek Prime Minister George Papandreou was to face a critical confidence vote in his newly appointed cabinet, ahead of a vote next week on unpopular spending cuts and economic reforms.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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